Woolworths ends its $1 milk

Minister for Agriculture David Littleproud has welcomed news Woolworths will effectively cease sales of $1 milk, but says there is still much more to be done.​

Woolworths has announced it will continue what was known as its “drought levy” indefinitely, meaning it will no longer sell milk for $1. It will continue to use its dairy processor to distribute the extra money to each farmer who produced the milk, paying extra for each litre that farmer produced (paying them as much of the 10 cents per litre levy as possible given administration costs).

“The $1 milk disaster began on January 1, 2011, and I hope today is the beginning of its end,” Minister Littleproud said.

“Whilst I wish Woolworths was taking a much bigger step, they’re miles head of their competitors and its sad it has taken National Party pressure to get to this point.

“Coles and Aldi continue to sell milk at $1. This drives down prices to farmers. Supermarkets can’t pretend selling milk cheap doesn’t hurt farmers and they’ve got to be called out on this rubbish.

“Consumers have the power here. If everybody who clicks ‘like’ on a Facebook video bought branded milk instead of cheap supermarket brand milk, or punished Coles and Aldi by going elsewhere, big changes would occur overnight.

“All supermarkets should pay a fair price for all dairy – this includes cheese and yoghurt, not just fresh milk, which is a small fraction of the market.

“The ACCC report into the dairy industry clearly says supermarkets use their market power to drive down how much they pay processors, and processors then use their bargaining power to drive down what they in turn pay farmers.

“There were around 7500 dairy farmers in 2010 and now there are just under 6000 as the industry has consolidated.

“Coles and the big German Aldi must begin to charge consumers a fair price for milk immediately. There’s no point having cheap milk for consumers today if it sends farmers broke.

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“Farmers have effectively not had a pay rise in a decade while the cost of feed and other inputs have gone through the roof. Australian Dairy Farmers has asked me to deliver a mandatory code of conduct for the industry and I’m doing that right now. But the supermarkets need to stop charging an idiotic price for milk.

“Selling milk cheaper than water devalues the product and the work farmers put into it.”

Background:

The ACCC report into the dairy market, handed down in April 2018, says:

“The dominant picture that has emerged is one of significant imbalances in bargaining power at each level of the dairy supply chain. This begins with the relationships between retailers and dairy processors, and progresses down to the relationship between processors and farmers.”​

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